Home Finance What is a payday loan and how does it work?

What is a payday loan and how does it work?


If you have an urgent need for cash such as an unexpected bill or expense, a Payday can bridge the gap until your next paycheck. Things come up and if you find that you don’t have the necessary funds and payday is still too far away, you might consider using this service to get the cash you need.

A payday loan is a short-term loan that uses your employment to qualify instead of credit (see Zebra Loans). The loan can be repaid through regular installments or all at once from your bank account. Because interest rates vary and can be high in some instances, it is recommended that you use them only as a last resort or only for emergencies.

Here is how it works:

To qualify for a loan you must:

  • Be 18+ years old
  • Be a resident of New Zealand
  • Be employed for more than 3 months
  • Earn a minimum of $400 per week
  • Have an active bank account
  • Have a bank statement or utility bill
  • Have a mobile phone and email address

The Application Process

Fill Out Forms

Decide how much you want to borrow. Loans are typically between $100 – $1,000. On the application, you will be asked when your paydays are and how much you are paid. You will have the option to choose how many payments you wish to make to repay the loan. Complete and submit the application.


The company will check the information provided on your application, including contacting your employer and any references you put down and make a decision within 24 hours. If you qualify, you will receive a notice and the funds will be sent to the bank account you provided.

Funding Received

Once you receive the funds in your account you are free to use them as needed. Your account will be debited each payday for the amount you listed for repayment of your loan.

Things to Remember:

This is a debt that must be repaid on the schedule that you agreed to when you applied. Some loans are reported to the credit agencies so you will want to be prompt in your payments to avoid negative marks on your credit record.

If you run into problems and can’t pay on time contact the lender and try to make arrangements for payment. Often times if you’ve had a good record of paying on time, they will be willing to work with you for a resolution.

Payday Loans are a source of quick cash for bills when you need it. If you don’t want to rely on your parents for money and have a permanent job you may qualify for a loan. Use credit wisely and repay on time to avoid additional fees and interest.